Why are Debt for Nature Swaps Not Used More Often?

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  • Written By: Mary McMahon
  • Edited By: Bronwyn Harris
  • Last Modified Date: 03 March 2020
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On the surface, debt for nature swaps sound like a great idea. While simultaneously reducing a nation's debt, a debt for nature swap also helps to preserve that country's natural environment, ensuring that future generations can enjoy it. However, there are some serious problems with debt for nature swaps which mean that they are not ideal or suitable solutions for every situation, despite the best wishes of all involved.

There are two basic types of debt for nature swap. In a bilateral swap, a nation forgives debt which is owed by another country in exchange for environmental concessions. For example, England might choose to forgive some Brazilian debt in exchange for a pledge to reduce deforestation. In a commercial debt for nature swap, a merchant bank sells the debt of a country to non-governmental organizations which agree to forgive the debt as long as the country takes steps to improve its conservation practices.

One of the biggest problems with debt for nature swaps is that some people view them as imperialist and colonialist. This is understandable, because the Northern hemisphere owns the majority of the debt in the world, and many formal colonial powers like England are involved in debt for nature swaps. Being told how to manage your environment by a former colonial power can be tough for some countries to swallow.


In addition, debt for nature swaps typically only handle a very small proportion of a country's debt, and they do not address the issues which led to the accrual of debt in the first place. By their nature, debt for nature swaps also do not address the conditions which might be leading to environmental degradation, and they tend to be very difficult to enforce.

Citizens of developing countries have also expressed dissatisfaction with debt for nature swaps because they do not take the individual needs of a country and its citizens into account. This has been a major problem in areas with large indigenous populations which have their own environmental resource management techniques which they have been using for thousands of years. Some of these tribes resent debt for nature swaps because they can lead to decreased access to their native lands.

When a debt for nature swap is well engineered and the individual circumstances of a country can be taken into account, it can be one tool to help the developing world deal with mounting debt and to preserve the environment. These swaps are far from a permanent solution to the world's problems, however, and they need to be combined with other initiatives for best success.


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Post 2

It's a very bad idea, because most parts of the foreign debt are illegitimate or odious. So people from the south don't have to reimburse them. There's nothing to exchange except for those who make a double profit from this incredible burden. Abolish is the way.

Post 1

It's not "England" it's "Britain" as in "British Empire". England is *part* OF the "United Kingdom of Great Britain" together with Scotland, Wales, and Northern Ireland.

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